Intel offers many retirement and investment-related benefits, and coordinating them or choosing between them can be complex. Veripax Financial Management is intimately familiar with Intel's benefits, and can help you make important decisions regarding
Coordinating these benefits with each other and as an overall financial plan tends to be a complex and iterative process, so it is best to set up an appointment to discuss your situation in detail.
Intel SERP (Sheltered Employee Retirement Plan) went through significant changes in 2011 that eliminated many investment choices in the 401(k) but opened up some other significant opportunities. The most significant feature addition that was added in 2011 is BrokerageLink, which is Fidelity's version of a self-directed 401(k). BrokerageLink allows employees to create an account inside the 401(k) that can hold any mutual fund or Exchange Traded Fund (ETF) available on Fidelity's brokerage platform. This creates a way to diversify your SERP portfolio with investments that do not necessarily move in lock-step with the overall market, which can be an excellent complement to Intel's Profit Sharing investments.
Because Veripax uses Fidelity as the primary custodian for client accounts, VFM can help you manage your 401(k) and coordinate the investments with other accounts you may have outside of SERP. Managing a BrokerageLink account along with outside accounts as a single investment portfolio is a more logical and efficient way of managing retirement investments. An additional benefit you receive from having VFM directly manage your BrokerageLink account is being able to take advantage of our status as an independent Registered Investment Advisor (RIA). As an RIA, our trading costs are lower for any funds you may want to use that are outside of Fidelity's "No Transaction Fee" funds, and loads are waived for funds that would normally charge front-end or back-end load fees. In addition, we do not include BrokerageLink accounts in our fee calculation, which means that it literally costs you nothing to have your 401(k) professionally managed.
Intel offers the option of a Roth 401(k) in addition to the traditional 401(k). Using a Roth 401(k) can make sense for some employees, but there are many factors that should be considered before deciding on one version or the other.
Intel SERPLUS (Sheltered Employee Retirement Plan Plus) offers a way for senior employees to defer income from salary and bonuses to a later date, typically after retirement. SERPLUS is a separate plan from your 401(k), and has a different set of rules and protections. SERPLUS is considered to be a "nonqualified" plan, meaning that your contributions are held in Intel's general assets instead of a separate Trust. In the event of an Intel bankruptcy, employees with SERPLUS accounts would have an unsecured claim against the general assets of Intel, along with all other unsecured creditors. This is what the IRS refers to as a "substantial risk of forfeiture," which is a characteristic and requirement of nonqualified plans.
SERPLUS offers a long list of mutual funds to choose from, which can be a daunting task even for an experienced investor. Many employees make the mistake of choosing too many funds, which can effectively create a very expensive "total market" portfolio. VFM has many years of experience working with the Intel SERPLUS plan and can assist you in not only putting together a diversified investment portfolio and coordinating it with outside accounts, but can also give advice on the various payout options that are available with each SERPLUS contribution.
Many Intel employees who have consistently contributed to the Employee Stock Purchase Plan, excercised options, or received grants of RSUs, may find themselves with a large block of Intel stock. VFM typically recommends diversification away from concentrated stock positions, but if you have one, what is the best way to survive the next earnings announcement or gradually sell the position?
A Covered Call strategy can be an excellent way to squeeze additional income from your stock position and boost the return while you gradually sell off shares (or keep the shares and simply continue to generate additional income). For those who wish to hang onto their positions but are concerned about the effect of an earnings announcement, an Option Collar can be used to limit the possible loss, while still allowing the potential for further growth. VFM has deep expertise in all levels of option strategies, and has helped many Intel employees get the most from their Intel stock positions.